ACA NJ Employer Reporting Requirements
The shared responsibility (ESR) provision of The Affordable Care Act, or more commonly called the Employer Mandate or “Play or Pay” requires large employers in NJ pay a penalty if they fail to offer health insurance to full time employees. There is an exemption offered to small employers in NJ if they have 50 or less full-time employees. While this took effect in January of 2015, there was a special transition offered to some NJ employers, allowing them to delay their compliance without a penalty until several months into 2016. As we are now moving forward into 2016, it is time to make sure your business is fully compliant with the Affordable Care Act. We want to be sure that all businesses understand the ACA NJ Employer Reporting Requirements.
At its core, the concept behind Play or Pay is a simple one. To play the employer offers health insurance coverage to full time, or full time equivalent workers. You pay by receiving a penalty if you fail to do so. Though the concept is very simple, the details for of the ACA NJ Employer Reporting Requirements leave many open questions.
How Are Full-Time Employees Defined?
First let’s make sure we clearly understand who constitutes as a full-time employee in NJ. NJ Employer Reporting Requirements state that a full-time employee is someone who works as a common law employee for 30 or more hours per week on average. In other words, each employee with 120 or more hours of service in a month counts as one full-time employee.
What Is A Full-Time Equivalent Employee?
To calculate the number of full-time equivalent employees, total the hours of service of all non-full-time employees in a month and divide that by 120.
Am I An Applicable Large Employer?
To meet with the standards of the Affordable Care Act NJ Employer Reporting Requirements, you must figure out if you are an applicable large employer. To do this, count the number of both full time and full-time equivalent employees for each month in the previous year. Add the together and divide by 12. This will give you the result of your average number of employees. If the resulting number is under 50, you are not and Applicable Large Employer. If the result is higher than 50 you likely are an Applicable Large Employer but may have other considerations such as seasonal workers and other special exemptions.
What Is Adequate And Affordable Coverage?
To be considered adequate coverage, and employer must offer minimum essential coverage. This can be any employer-sponsored group health plan, but does not include stand-alone dental or vision coverage. To be considered affordable coverage, if elected , the employee’s contribution for self-only coverage, cannot exceed 9.5% of the employee’s income.
The Affordable Care Act can be difficult and intimidating for employers to navigate on their own. At Bogle Agency Insurance in Bergen County NJ, we can help employers understand the ACA NJ Employer Reporting Requirements and help you find the right group health insurance options for your business.
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